Why we should adopt a flat tax

Why we should adopt a flat tax

Many conservatives, such as Rand Paul and Ted Cruz, advocate for a flat tax. What exactly is a flat tax, and why is it a good idea? A flat tax is a system that applies the same tax rate to all individuals and businesses, regardless of income or size. I would argue this is fairer and brings tremendous economic benefits.

Firstly, it reduces the cost and time of filling out taxes, which harms our economy. The current federal income tax code is around 10 million words long; so long that we can only estimate its length! Dealing with this complicated federal income tax code, according to a study done by George Mason University, has an annual economic cost of $600 billion. The Economist Magazine has also estimated that the total annual cost of the United States’ complicated tax system is 2% of the total GDP.

A flat tax would also be a huge blow to crony capitalism. Big business would not be able to find tax loopholes since the tax code would be much simpler; unsurprisingly, most of the tax loopholes were designed by the rich and politically connected. Politicians would also be robbed of the power to dish out tax breaks to companies. It would also help solve capitalism’s image problem. Capitalism is often associated with politicians colluding with Big business. By limited the influence of big business we can improve capitalism’s image.

A flat tax has been proven to stimulate economic growth. Nations that use flat taxes include Estonia, Latvia and Lithuania, and they have all experienced economic growth since adopting flat tax rate policies.

However, liberals often claim that a flat tax would bring in too little revenue and the government simply wouldn’t have enough money to fund its current program. This is absolutely true, if you consider the responsibilities that the government currently takes on. However, if the size of government is reduced, then a flat tax should be able to sufficiently fund the more essential, basic state program.

There is also a moral case for flat taxes. Many argue that it is unfair that people that work hard and therefore earn money pay more as percentage of their income. They also generate more wealth for the economy. It is as if they are being punished for hard work.

Overall flat taxes would be a good thing: it is right morally, it reduces the influence of big business and corrupt politicians and makes economic sense. If you want to learn more about the benefits of a flat tax, check out Prager U’s video on this topic. I have put the link of the video below.

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